EXHIBIT 10.3
AMENDED AND RESTATED MANAGEMENT ADVISORY AND
CONSULTING SERVICES AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 7th day of June, 1996, amended
and restated as of January 24, 1999.
A M O N G:
PANOLAM INDUSTRIES, INC.,
a corporation incorporated under
the law of the State of Delaware
(hereinafter referred to as "U.S. Opco")
OF THE FIRST PART,
- and -
PANOLAM INDUSTRIES LTD.,
a corporation incorporated under
the laws of the Province of Ontario
(hereinafter referred to as "Can Opco")
OF THE SECOND PART,
(together with U.S. Opco, the "Companies")
- and -
GENSTAR CAPITAL, L.L.C.,
a limited liability company
organized under the laws of the
State of Delaware
(hereinafter referred to as "Genstar")
OF THE THIRD PART.
WHEREAS the Companies desire to avail themselves of the business
experience and operating expertise of Genstar in arranging financing, strategic
planning, negotiating and procuring contracts, tax planning, investor relations,
cost controls, compensation structure, government relations and other areas of
corporate management;
AND WHEREAS the Companies have requested of Genstar and Genstar has
agreed to provide the Companies on an ongoing basis, subject to the terms and
conditions
specified herein, with management consulting and advisory services related to
the business and affairs of the Company;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
respective covenants and agreements contained herein, the payments provided for
herein and for other good and valuable consideration, the sufficiency and
receipt of all of which are hereby acknowledged, the parties hereto agree as
follows:
1. RETENTION OF GENSTAR. Each of the Companies hereby retains Genstar as
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management and corporate consultant and Genstar accepts such retention on the
terms and conditions set forth herein.
2. SERVICES.
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(a) Genstar shall advise the Companies concerning such corporate matters as
relate to strategic planning, proposed financial transactions, procurement of
contracts, tax planning, investor relations, cost controls, compensation
structure, government relations and other management matters related to the
Companies' business and affairs, and as to such other matters as the Companies
may reasonably request.
(b) Genstar shall perform all such services as an independent contractor to
the Companies and neither Genstar nor its affiliates nor any of their respective
directors, officers, agents or employees shall be liable for any advice offered
or action taken by it or them in connection with this agreement. Genstar shall
not by virtue of this agreement be considered an employee, agent or
representative of the Companies and will not have by virtue of this agreement
any authority to act for or bind the Companies without the Companies' prior
written consent.
3. COMPENSATION.
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(a) In consideration of the services provided by Genstar hereunder, the
Companies shall pay to Genstar a management consulting fee of U.S. $600,000 per
annum (the "Consulting Fee"), escalating by 3% per annum on June 7 of each year,
commencing on June 7, 1997. After February 18, 2002, the Consulting Fee shall
increase to U.S. $1,391,000 per annum, escalating by 3% per annum on June 7 of
each year, commencing on June 7, 2002. The Consulting Fee is payable in arrears
in equal quarterly installments during the term hereof commencing on the date
hereof subject to withholding as required by applicable law.
(b) The Companies shall reimburse Genstar for all reasonable out-of-pocket
costs and expenses incurred by Genstar in connection with the provision of
services hereunder promptly upon receipt of a statement of such costs and
expenses from Genstar.
(c) Any amount not paid when due under the terms and provisions of this
agreement shall bear interest at the rate of 10% per annum until paid full, both
before and after demand, default or judgment.
4. FURTHER OBLIGATION OF THE COMPANIES. The Companies shall in good faith
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consider all advice and recommendations of Genstar relating to the subject
matter of this agreement.
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Notwithstanding the foregoing, the Companies shall not have any obligation
whatsoever to follow or implement any such advice or recommendation of Genstar.
5. TERM AND TERMINATION. This agreement shall commence on the date hereof and
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shall continue through the period ending on the tenth anniversary of the date of
the amendment and restatement hereof, provided, however, that this agreement
shall terminate on the last day of the first calendar quarter in which Genstar
Capital Partners II, L.P. together with its affiliates no longer holds, either
directly or indirectly through entities controlled by them, at least 10% of the
common stock, par value $0.01 per share, of either Can Opco or U.S. Opco at such
time outstanding. In the event this agreement terminates pursuant to this
Section 5, the Consulting Fee shall be prorated through and paid on the date of
termination.
6. AMENDMENTS, ETC. No amendment of any provision of this agreement shall be
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effective unless the same shall be in writing and signed by the parties hereto.
7. NO WAIVERS. Except as otherwise provided in this agreement, any failure of
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any of the parties to comply with any obligation herein may be waived by the
party entitled to the benefit thereof only by a written instrument signed by the
party granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or conditions shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.
8. NOTICES. All notices, requests, claims, demands and other communications
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hereunder shall be in writing and shall be given or made (and shall be deemed to
have been duly given or made upon receipt) by deliver in person, or by courier
service, cable, telecopy, telegram, or registered or certified mail (postage
prepaid, return receipt requested) to the respective parties hereto at their
addresses set forth on the signature pages to this agreement (or at such other
address for a party hereto as shall be specified in a notice given in accordance
with this Section 8).
9. ASSIGNMENT. Neither of the parties hereto shall have the right to assign
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this agreement or the rights or obligations hereunder without the consent of the
other parties.
10. HEADINGS The headings contained in this agreement are for reference
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purposes only and shall not affect in any way the meaning or interpretation of
this agreement.
11. SEVERABILITY. Any provision of this agreement which is prohibited or
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unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
12. ENTIRE AGREEMENT. This agreement constitutes the entire agreement between
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the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understanding, whether written or oral, between the parties
hereto with respect to the subject matter hereof.
13. GOVERNING LAW. This agreement shall be governed by, and construed in
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accordance with, the laws of the State of New York.
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14. COUNTERPARTS. This agreement may be executed in counterparts, each of
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which when executed shall be deemed to be an original, but all of which taken
together shall constitute one and the same agreement.
IN WITNESS WHEREOF the parties hereto have duly executed this
agreement as of the date first above written.
PANOLAM INDUSTRIES, INC.
By:_________________________________
Name: Xxxxxx Xxxxxx
Title
00 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
PANOLAM INDUSTRIES LTD.
By:_________________________________
Name: Xxxxxx Xxxxxx
Title
c/o Panolam Industries, Inc.
00 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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GENSTAR CAPITAL, L.L.C.
By:_________________________________
Name: X.X. Xxxxx
Title
By:_________________________________
Name: Xxxxxxx Xxxxxxx
Title
Metro Tower, Suite 1170
000 Xxxxx Xxxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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